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2. Alpha Investments, Inc., offers to buy Beta Computer Corporation. On May 1, Beta gives Alpha copies of Beta's financial statements for the previous year.
2. Alpha Investments, Inc., offers to buy Beta Computer Corporation. On May 1, Beta gives Alpha copies of Beta's financial statements for the previous year. The statements show an inventory of S1 million. On May 15, Beta discovers that the previous year's inventory is overstated by S500,000, but does not inform Alpha. On June 1, Alpha, relying on the financial statements, buys Beta. On June 10, Alpha discovers the inventory overstatement. Can Alpha succeed in a suit against Beta for fraud
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